Category: Financial Planning

  • What is lifestyle planning and how does it affect my finances?

    What is lifestyle planning and how does it affect my finances?

    When you think of financial planning, you probably imagine ways to increase your wealth, such as making a budget, reviewing what’s coming in and going out, and creating a plan for how to make the most of your money.

    You may think of investing in stocks or bonds, or of starting a retirement fund. Perhaps you think of saving for a major expense, like a home or education for your children.

    And that all counts as financial planning. But lately, the concept of lifestyle planning is giving financial planning a run for its money.

    Close Up Of Modern Man Accessories

    What is lifestyle planning?

    Lifestyle planning is the idea of using your money to get the most enjoyment out of your life.

    It means maybe foregoing the maximum financial return in exchange for something you value more. You choose to budget your money in a way that makes you truly happy. In other words…

    You plan to use your money in the ways that bring you the most joy.

    If the idea seems scary to you, you’re not alone. Most of us were raised with the idea that you should always save for a rainy day, put away as much money as you can, and invest instead of spend.

    But lifestyle planning doesn’t mean that you frivolously blow through your life savings.

    It means taking the time to consider how you want to live the one life you get. And then, working off of that vision by creating a financial plan that makes those dreams come true.

    Smiling Relaxed Man Enjoying Pleasant Morning Sitting On Terrace

    Get started with your lifestyle plan

    Sit down and do some soul searching. Write down exactly what you want your life to look like.

    Where do you want to live? Who do you want to live with, if anyone? What kind of car do you want to drive? Where do you want to go to school? What clothes do you want to wear? How do you want to eat? Do you want to travel? If so, how often?

    Get as specific and as detailed as possible. Sketch out your perfect life in your mind.

    Think about the things that are most important to you.

    Once you’re satisfied with your vision, take stock of where you stand today.

    How much money do you earn now? What’s your future earning potential? Are you spending money on things that aren’t actually important to you?

    When you start matching up your reality with the way that you want to live your life, the gaps will become obvious. You will then be able to make adjustments. Maybe it’s not as important to drive a luxury car or any car at all. Maybe a change in career is necessary.

    It’s okay if expensive items actually are more important to you than you initially thought. You can now plan for that. Or maybe it has become clear that you actually need more freedom of mobility in your career if travel is a priority.
    Whatever it is that you come up with, you can start making a roadmap for how to get there.

    And that’s how lifestyle planning affects your financial planning. You can’t reach your goals if you don’t give yourself the means to do it.

    Once you know what you want, you can make a specific plan for how to make it a reality. When you’re ready, enlisting the help of a professional accountant will allow you to make the best financial decisions.

    Get in touch if you would like to learn more about how we can help you get started with a personal lifestyle plan. With a bit of strategy, you can start living the way you envision sooner.

  • 4 signs you’ve found the right financial advisor for you

    4 signs you’ve found the right financial advisor for you

    Most people need some help when it comes to financial planning and investing. That’s when we turn to financial advisors. With many options available, it’s important to ensure you choose a financial advisor that you can trust and feel comfortable with.

    So what are some signs that a financial advisor is a good fit for you? Here are some things to look for when deciding who is best for you to work with.

    2

    1.They have clients that are similar to you

    Every client has their own unique needs, goals, and circumstances. But there are some commonalities among clients. Lawyers, doctors, teachers, and other professionals have different pension and retirement plans that affect how much they need to put away themselves. Their careers also alter the resources available to them.

    The stage you’re at in your career affects your resources and needs as well. A younger person with a long investment horizon ahead of them may have a greater risk tolerance than someone a year or two away from retirement.

    When looking for a financial advisor, find someone who helps clients in situations that are similar to yours. While they won’t be in an identical position, their needs will be similar enough that you can get an idea of how well that financial advisor can help you.

    2.They come with a network of advisors

    Just as your general practitioner will send you to a specialist to deal with specific healthcare concerns, a financial advisor will have a network of professionals they can refer you to for your financial needs. For example, they may have an estate lawyer who can help with drafting wills, an accountant for tax returns, and a bookkeeper for business dealings.

    A strong financial advisor knows that they can’t take care of everything for you, and they will have cultivated a team of experts who can help you manage your finances.

    1

    3.They keep you focused on your goals

    Financial advisors know that investing is stressful, and novice investors can become overwhelmed by dips in the market. This leads to impulsive decisions with disastrous consequences. Your advisor is a coach, who keeps you on track when investment issues arise.

    They can show you the bigger picture–how a dip in the market doesn’t mean it’s time to cash everything in–and how the long-term trends affect your investments. Because they’re there to help you, they can take the emotion out of your investments and bring it back to the information available to you, so you can make smart decisions.

    4.They take the time to get to know you

    As mentioned before, every client is different. Even where there are similarities, your unique circumstances mean your goals, resources, and needs are different from other clients. The best financial advisors take the time to get to know and understand their clients. They ask about risk tolerance, future goals, what those goals look like, and how comfortable you are asking questions.

    They take the time to explain everything to you, so you feel confident and comfortable with the decisions being made. They make it clear that they’re working with your best interests in mind, based on your circumstances. And they are available to talk through your concerns.

    It’s in your best interests to work with a financial advisor who works well with you. That’s how you get access to the best, most knowledgeable, and most relevant advice. Talk to people to find out who they go to for their financial advice. Look up reviews and testimonials and don’t be afraid to ask questions. That’s how you get to know the people who will be helping you.

  • 5 signs you have cash flow issues

    Whether it’s for personal use or for your business, cash flow is important. The movement of money in and out keeps everything running smoothly, and you have to know where you stand. But what if it seems that your cash flow isn’t really, well, flowing? If it seems that you’ve tightened your belt in every area and still coming up short, you might have cash flow issues.

    Here are some telltale signs that your cash flow is actually at a standstill.

    2

    1.You’re using your credit card every month

    Lots of people use their credit card for all purchases these days, and that’s okay – as long as you’re also paying it off. There are definite advantages to using your card, like points or rewards, but these perks are irrelevant if you’re spending money that you don’t actually have. If you can’t pay what you’re spending on your card with cash every month, it’s time to reevaluate how you’re using that card. Think of the real dollars you’re spending every time you tap at the till, and if you don’t have real money to pay off your purchase, reconsider it.

    2.You can’t cover your bills

    This is a major red flag, and a sign that your budget doesn’t add up. All of your bills need to be accounted for every month, and that includes setting money aside for large future expenses, like taxes. Bills should really be accounted for first, right up there with money for food and shelter. If you find that it’s a challenge to pay all of your bills, it’s likely that you don’t have enough cash coming in; or you’re spending it on things that shouldn’t be as high on the priority list.

    3.You’re running out of money at the beginning of the month

    If all of your payments come out and you find that you’re already tapped at the start of the month, you’re likely not bringing in enough money. When we add up our living expenses and plan for all of our payments to come out, it’s important to have some wiggle room to carry you through to the next month. Unexpected expenses can pop up, and nothing is as stressful as finding out you don’t have enough money. Make sure you’re earning enough to carry you through the entire month, and not just the typically bill-heavy first week.

    4.There are no other costs to cut

    So you’ve gone through your subscriptions, pared down your grocery bill, cut back on your nights out, and you’re still not bridging the gap. If you’re planning for your business, maybe you’re just barely scraping by with no profits, or you aren’t left with enough money to pay yourself. When every penny you make is going toward only the necessities, you definitely have cash flow issues. If you’ve cut back in every imaginable area and are still struggling, you need to find a way to bring in more money. It’s as simple as that.

    Close Up Home Sale Icon With Key Stacked Coins Calculator Math Blocks

    5.You don’t have an emergency fund or cash chest for difficult times

    This sign goes largely ignored by many people these days, with the cost of living being so high. It’s very difficult to save any money under these circumstances, and the reality is that most people just don’t. But don’t ignore this telltale sign that your cash flow isn’t healthy. It’s crucial to have something saved for a rainy day, and putting some money in your savings each month must be done, just like any other bill. Otherwise, you’re likely to lean on credit when these surprise expenses inevitably occur.

    Final thoughts

    It’s easy to ignore cash flow issues when we have the safety net of credit and if we’re managing to scrape by. But, managing your cash flow is a critical practice that alleviates stress and prepares you for the future. Pay it the attention it deserves and reap the rewards down the road.

  • Should you lease or buy equipment?

    Should you lease or buy equipment?

    Many small business people wonder whether it’s better for them to buy or lease capital equipment for their businesses. Your options regarding leasing or buying depend upon the nature of your particular business, but there are nevertheless a few guidelines you can follow to help you decide what you should do.

    If you have the money available, and the item is really necessary to your business, then it will usually benefit you to buy the item outright. If there is no way you can find the finance (i.e., you have no money) then you will have to finance the purchase out of cashflow, which means leasing it.

    Businesspeople Working In Finance And Accounting Analyze Financi

    A caution

    A special note here: Don’t buy an item at the risk of not being able to meet your bills in the next month. Only use surplus cash—and then only if it really is ‘surplus’, not just temporarily in the bank account. You should work all this out in terms of your cashflow forecast and your forthcoming liabilities.

    If the options are not so clear cut, then you have some thinking to do. Ask these questions:

    • How often will you use the item?

    If the item is only going to be used every now and then, there is no real point in buying one. It will lie around for most of the year unused and is therefore a waste of your resources. So lease or hire the equipment when you require it.

    • What else could you do with the money?

    Could you earn a better rate of return on the capital required for the item if you invested it in your business? Your business might be at the stage where a few thousand ploughed back in as working capital will give you a far better rate of return than tying up the money in equipment. For example, would the money be better spent on marketing? In this case, it might pay you to lease.

    The effect on net profit

    The bottom line is always: how will your decision to buy or lease affect net profit?

    Let’s take a simple example, and calculate the net profit results for both options. Suppose you decide the business needs a machine worth $2,000 (we’ll ignore GST). You can either buy the machine outright or lease it (rent).

    • Option One

    If you rent, the machine will cost you around $100 per month, or $1,200 for the year. This can be added to your business expenses.

    • Option Two

    If you buy the machine, the total cost of $2,000 cannot be deducted from the net profit, as it will now be regarded as an asset. Suppose you can depreciate the machine at 33% a year. This means you can claim $660 as an expense for the year ($2,000 x 33%).

    Comparative costs

    • Option One

    You’ve spent $1,200 in cash, and can claim this $1,200 as a business expense. By having $1,200 as expenses, you’ll pay less tax (as opposed to not having the machine at all) of $288 (assuming a tax rate of 24%). So you could say that you’ve spent $1,200 and ‘saved’ $288, giving a net cash out for the business of $912 for that tax year.

    • Option Two

    You spend $2,000 in cash, and claim $660 as a depreciation expense, which gives you a tax ‘saving’ of $158 (24% of $660). So your net cash out is $1,842. Therefore, in the first year, it would have been better for the business, as far as cashflow is concerned, to have rented the machine. But what about year two? In Option One you’d still have to pay $1,200 in rent for that second year, and the net cash out is still $912.

    But in Option Two, you have no further cash to pay, and can still claim depreciation of $442 (33% of the asset’s now depreciated book value of $1340), which gives you a ‘saving’ of $106.

    This comparison shows, therefore, that whilst you might have gained a slightly better cashflow situation in year one, the lease option becomes far less attractive in subsequent years.

    So as a rule of thumb, if you lease equipment you will make a cash saving in the first year or two, and this is a viable alternative if you do not have the cash (especially for equipment that may cost thousands of dollars, or items you do not use regularly). However, long term, it’s much better to buy equipment outright, provided you can safely ride out the initial heavy cash commitment.

    High-tech equipment

    One additional factor is worth considering, though. When it comes to equipment that is strongly technology based (such as computers or even photocopiers) then people often choose to lease, with terms in their lease that allow them to update to new technology as it becomes available.

    In this way you avoid being stuck with outdated equipment that has little resale value or no longer serves your needs. This is often very much a judgement call that you can only make after speaking to the salesperson concerned.

  • How to choose the best investments for you

    How to choose the best investments for you

    The world of investing is daunting for many people. There’s so much to learn and a lot of terminology that isn’t part of the everyday lexicon. Dividends, EPS, historical returns… and what exactly is an NFT?

    But once you’ve mastered the basics and the language of investing, there’s another question at play: how do you choose the right investments for you?

    Of course, the goal of investing is to grow your money. That’s the most important thing. But there are some other things to consider. Read on to discover 6 tips to help you choose the right investments for you.

    Businesspeople Working Finance Accounting Analyze Financi 74952 1411

    1. Determine your level of risk

    All investments come with a degree of risk. Some long-term financial goals call for taking a bit more risk than you usually would, with the hope that you’ll eventually make a large gain. Stocks and bonds would fall into this category. If you’re not comfortable with risk, perhaps cash equivalents would be more your speed. No matter what your investing goals are, you must ask yourself just how much you’re comfortable with losing, and choose accordingly.

    2. Know your timeline

    By the same token, you must consider your timeline. While it’s possible to make a great deal of money in a short amount of time, it’s far from likely. Investments are better able to weather the ups and downs of the market over time, and it’s important to consider the time your investment will need to appreciate to make true gains.

    3. Consider your values

    Sure, there’s lots of money to be made in oil (as well as plenty to be lost) but if you’re a passionate environmentalist, chances are you’re not going to feel good about investing in fossil fuels. Keep it simple and choose investments that will help you sleep well at night. Whatever it is that you care about, don’t go ahead and invest in something that goes against those values. The emotional strife it causes, even if you make large gains, isn’t worth it.

    4. Diversify

    A blended approach truly does work best. This is true not just to make gains, it also helps you manage risk. Having your assets divided into a mix of investments allows you to weather any storm, especially if your investments are long-term. A loss in one area is easily countered by a gain in another when you have successfully diversified your portfolio.

    Forex Trade Graph Chart Concept

    5. Do your research

    So you heard your cousin’s colleague’s brother-in-law made a fortune by investing in crypto, and there’s rumblings that now is a great time to get in. Everyone loves an easy payday, but before you go running to buy 10,000 of the latest meme-inspired digital coin, make sure you understand exactly what you’re buying. And if you decide to go for something that’s a little out there, make sure you’re comfortable losing your entire investment.

    6. Get some guidance

    Investing is a smart move, and there are many benefits to be had. However, if you’re feeling like it’s just way over your head get help from a professional. There are plenty of options these days for those who would like a bit of assistance in setting up their investment portfolio.

    Final thoughts

    There is plenty to consider when investing. Start by evaluating your own needs, wants, and interests, and use those to set up your goals. And don’t forget to get help if it seems like too much.

  • 6 Benefits of long-term investing

    6 Benefits of long-term investing

    When it comes to an investment strategy, there are an almost endless number of paths you can take. Depending on your overall priorities, needs, and values you can follow an established formula or set your own path.

    One path that has numerous benefits is long-term investing. In long-term investing you put your money in an investment with the goal of leaving it there for a long time. You’re not buying and selling your stocks quickly based on the whim of the market or trying to take advantage of opportunities. Instead, your money sits in the investment and grows over a long period.

    Businesspeople Working Finance Accounting Analyze Financi 74952 1411

    Here are 6 benefits of long-term investing.

    1. It’s less emotional

    It’s easy to get worked up about every high and low in the stock market and worry that you should be moving your money around to take advantage of each trend. When you invest long-term, you don’t have to think about those things. You don’t worry if stock prices drop a small amount in the short term because you’re focused on the future. With a long-term investment, you’re more concerned with the viability of a company’s business model or its overall growth strategy, rather than whether a bump in an overseas market causes a one-day drop in value.

    2. Your portfolio will almost certainly gain value

    Over the long term, portfolios tend to grow in value. If you buy and sell based on dips in the market, you could bet right that the stock will or won’t increase in value again, but you could also be wrong. If you stick with your stocks that tend to increase in value and hold onto them even over small drops, chances are they’ll readjust and continue to increase in value.

    3. Lower tax liability

    Short-term traders, who have their investments for 365 days or fewer, pay higher taxes. Long-term capital gains taxes tend to be lower. If you invest long-term, you’ll likely be paying less in taxes than active traders. That’s more money in your pocket, or at least in your account.

    4. You’ll pay less in commissions

    Active trading can quickly allow commission fees to add up, especially if you’re a day trader. As a result, you could pay thousands of dollars in commissions each year. If you invest long-term, you may pay a small commission fee a few times a year, but your gains will more than likely cancel out those costs very quickly.

    5. You can compound your earnings

    Long-term investments enable you to compound or reinvest your profits over time, which can give you even higher returns on your investment.

    Finance Accounting Paper Desk Using 1262 2292

    6. Anyone can do it

    When you invest short-term you have to take advantage of econ

    Finance Accounting Paper Desk Using 1262 2292
    Finance Accounting Paper Desk Using 1262 2292

    omic conditions and make–or sell–the right investments at the right time. That takes knowledge and in-depth planning.

    When you invest long-term, you can invest in a few companies and carry on with your life. You don’t need to be constantly checking the stock market to figure out what you need to buy or sell on a daily basis, and you don’t have to understand a lot about the market or have extraordinary insights. All you need is patience.

    Final thoughts

    There are countless strategies out there that you can use to invest your money, but the one that provides you with the least stress and requires the lowest amount of expertise is long-term investing.

    Talk to us to learn more about how investing can help you build your wealth.

  • How to finance your child’s education

    How to finance your child’s education

    As a parent, you may worry about how to ensure your child can receive a post-secondary education. Costs are constantly rising, and you may face high tuition fees as well as the cost of living expenses if your child has to live away from home.

    Here are some steps you can take to save for your child’s education.

    Be clear about what you can and cannot afford to pay

    Being clear about what you can afford to pay for your child’s education is critical. First, think about what kind of lifestyle you want for yourself when you retire. How much will you need to save for your retirement? The type of lifestyle you want will impact how much money will be available, so it’s important to be realistic.

    If you feel it’s reasonable that you’ll cover a few years of tuition, but not the full cost, or you can help out with tuition and on-campus residence, be honest about that and let your child know they’ll be responsible for some costs, too.

    Sah 3

    Get your kids started on a bank account

    Getting your children into the habit of saving early can help them out in the future. Open a savings account for them and put some money in as a gift or just to help them get started. They will see that they need to save money if they want to buy something big like a new computer or an electric guitar. If you talk about saving for things with your kids, it can also make them more responsible with their own money when they have it later on in life.

    Use the bank account to track how close they are to paying for their education and celebrate when they achieve milestones, such as saving enough money for a course.

    Look into grants, scholarships, and bursaries

    There are many opportunities out there for your child to earn money that doesn’t have to be paid back. Governments, schools, private companies, and individuals often offer to fund students planning on attending post-secondary schooling. These can be awarded based on high grades, volunteer work, area of study, hobbies, or need.

    Look into all the options available to your child and encourage them to apply for any financial help they’re eligible for.

    Sah 1

    Choose a school wisely and limit borrowing

    You’ll want to choose a school wisely and limit borrowing. Before you investigate loans, think carefully about the school your child is considering. Encourage your child to research schools and ask questions like:

    • What’s the cost of attendance?
    • What scholarships are available?
    • Are there similar education programs nearby or will they have to move away?
    • Can they do a couple of years at a less expensive school closer to home and then transfer schools?
    • How much debt do students typically graduate with?
    • Will they be able to repay their loans given their projected income based on what fields they tend to pursue?
    • Are their alumni succeed in their chosen field(s)?

    These are just some of the variables to consider when deciding on a school.

    Final thoughts

    While you may want to pay for everything your child will do in their post-secondary education, remember that every little bit helps. So even if you can’t afford to pay for their full tuition, being able to help out with part of the tuition will help set them up for success. It may also be more meaningful for them if they are required to contribute financially to their education. What’s important is that you factor in the cost of future education into your overall budget, and remember that you also have your retirement and other expenses to cover as well.

    If you’re looking for information about setting up a sustainable savings plan for your child’s education, contact us to learn more about how we can help you.

  • How to keep your finances on track

    How to keep your finances on track

    When it comes to your finances, it’s a good idea to check in on your progress periodically, to see if any adjustments to your budget or changes in your habits are necessary. Even if you’ve set your budget for the year, you may learn a new strategy or have a priority come up suddenly that causes you to shift your thinking.

    Here are ways to take stock of your finances, and ensure they’re still on track.

    1. Review your budget quarterly

    Now that you’re a few months into the year, take the time to review whether you’ve kept your budget on track for the year. What’s worked well and what hasn’t? Are there adjustments you need to make? Are you spending more than you intended? Have you had any unexpected expenses that require a shift in your strategy?

    Double-check your goals to see how you’re progressing toward them. Do you have as much money in your emergency savings as you want? Is enough money going towards your retirement savings accounts as needed?

    1

    2. Identify and remove any unnecessary expenses

    With so many options for subscription services, chances are you’re paying for things you no longer use. Look at your bank and credit card statements to identify regular charges for items that aren’t necessary. Maybe you signed up for a streaming service you never watch, or a digital publication you don’t read.

    Be honest with yourself about these subscriptions. If you’ve had a gym membership for years and only go once or twice a month, it probably isn’t worth a monthly fee. If you make regular use of it, however, then it might be more worthwhile.

    Keep only recurring expenses you actually use, no matter how little they cost. While individually they may seem like small amounts, those regular expenses add up over time.

    3. Set up a separate account for extra spending

    If you have one account that your regular expenses and your extra expenses come out of, it can be easy to lose track of how much money is in that account. Keep separate accounts, one for your regular expenses and one for those that are discretionary.

    If you like, you can have more bank accounts to further keep track of your expenses, but at the very least have two separate accounts for your spending.

    3

    4. Use reminders to keep track of due dates

    Technology has made it much easier to keep track of looming payment deadlines. Make a list of your bills and their payment dates. Set up a way to keep track of and alert you to upcoming deadlines. This can be a calendar notification, a smartphone app, an agenda, or even a wall calendar. Take a look at the app every so often so you can see how your payments are spaced out, and determine if you need to shift any payment due dates.

    5. Clean up your paperwork

    You don’t need to hold onto all your receipts for decades. Some you can get rid of right away, while those that are claimed on your taxes have to be held onto for a certain time period. Once that period has passed, shred them and get rid of them. Where possible, sign up for online billing and receipts, so you don’t have to worry about paper cluttering up your office.

    Final thoughts

    It’s a great idea to spring clean your finances, to ensure you’re on track for your budget and aren’t unnecessarily spending money. If you have questions about your finances, we have answers. Reach out today to find out more about how we can help you.

  • 3 Reasons Recurring Revenue is a Good Idea

    3 Reasons Recurring Revenue is a Good Idea

    What is recurring revenue? It’s the revenue you can depend on generating, year after year, with a high degree of certainty. It’s the repeat business or long-term contracts you’ve established with clients who know and trust your business.

    For example, you might bundle offers into a monthly subscription, or launch a points system that incentivizes loyalty with free gifts or special discounts. Recurring revenue comes in many forms and is considered the gold standard of business models.

    Jim Schleckser, a growth specialist with Inc. CEO Project, maintains that every business should have “recurring revenue woven into its core [and] if you’re not thinking along these lines, you’re putting the future of your business in jeopardy.”

    Strong words! Still, need a bit more convincing? Here are the top three reasons it’s a good idea to build recurring revenue into your business model.

    Tax

    1. Frees up more time to grow your business

    Consider this: if your business generates $1 million in revenue, and 75% of that total is recurring revenue, you’ll start each year knowing you can count on at least $750, 000. This immediately frees up time and energy for new product development, expanded marketing, and attracting new customers. Plus, the added financial certainty can help alleviate stress, which goes a long way to improving productivity and your overall wellbeing.

    2. Helps maintain positive cash flow

    Recurring revenue also helps business owners develop and stick to a reasonable budget. Knowing you can expect to earn a certain amount each month makes it easier to cover both routine and unexpected costs – like accounts payable, employee salaries, last-minute repairs, loan payments, etc.

    Ultimately, this predictability yields greater financial visibility. You’ll be better positioned to ramp up or lower expenses relative to revenue and stay cash flow positive

    It’s also worth noting that potential investors, private equity, and loan providers tend to regard businesses with recurring revenue as “safer bets” because they’re less prone to insolvency. If you’re hoping to attract a partner or secure a loan to expand your company, showing recurring revenue streams can help strengthen your position.

     3. Opens the door to valuable customer insights

    Generating recurring revenue streams requires looking closely at the particular wants, needs, and behaviors of your target audience.

    In order to build the long-term relationships necessary for repeat business, you must understand what matters most to your customers and how to meet those needs (in ways your competitors do not).

    As you research your market and talk with your clients, deeper insights will emerge about their particular preferences and pain points – knowledge that will directly inform your marketing and further refine your product or service offers. Enhanced customization leads to more competitive offers, which in turn supports recurring revenue.

    The bottom line? Business owners should focus on building long-term customer relationships, rather than focusing exclusively on one-off transactions. While lucrative one-time deals are definitely a bonus, recurring contracts are the gifts that keep on giving!

  • 4 Steps to Retiring Early

    4 Steps to Retiring Early

    Early retirement may sound like a big dream, but it is achievable if you’re willing to do some planning and stick to your strategy.

    Here are four steps you can take to put yourself in a position to retire early.

    1. Figure out how much money you’ll need after you retire

    This involves figuring out what age you want to retire at–if you want to retire at 55 you’ll need to save more money than if you retire at 60–the lifestyle you’ll want to lead, and how much money you’ll have access to through government and private pensions.

    Ask yourself questions such as:

    • Where do I want to live?
    • Can I move into a smaller home?
    • Do I want to live in a different location?
    • Will I want to travel?
    • Will I be eligible for a government pension?

    Plan

    2. Determine where you currently stand

    The amount of money you’ve already set aside factors into how much you’ll need to save for your retirement. If you already have solid savings and investments set aside, you may be able to retire earlier or put aside less each month to help you attain your goals. If you don’t, you may have to put off retirement by a few years or you’ll have to put aside a lot more money each month.

    Do you currently have an income that enables you to put money away for retirement? Does your job have a benefits plan that includes a pension?

    3. Make a plan

    The best way to ensure you reach your goals is to have a plan. A financial advisor can help you determine how much you need to save, whether your investment strategy is working for you, and what other steps you can take to make your money work the hardest for you.

    They can also help you develop a plan that’s realistic and reasonable given your current situation and your goals. Finally, they can keep you accountable for meeting your milestones and working towards your objectives.

    4. Stick to your plan

    After you develop your plan, you have to stick to it, and implement strategies that make it easier for you to do so. You might want to consider making your savings and investment plan automatic, so that money is automatically deposited into your savings or investment accounts every month. If you set a budget for spending, keep within that budget.

    Make sure you have an emergency fund so that if an urgent financial situation arises, you aren’t drawing from your retirement fund to cover your expenses. If you need to set aside a lot of money for your retirement, consider taking on a side hustle or looking for ways to earn some extra money that you can tuck away.

    If you’re looking for ways to save more money for your retirement, there are some steps you can take. For example, you could:

    • Move to a less expensive area
    • Downsize to a smaller property
    • Rent out extra rooms in your home (make sure you follow local laws on renting)
    • Purchase used cars with cash
    • Find ways to cut back on expenses that aren’t necessities
    • Pay down your debt

    Spend Save

    Final thoughts

    Early retirement is achievable if you’re willing to plan for it, set aside money, and be strategic. A financial advisor can help you determine what you’ll need to retire comfortably and how long it will take you to get that money set aside.

    If you’re looking for financial guidance, we’re here to help you. Contact us today to discuss how we can work together to help you achieve your financial goals.

  • Investment Basics – Understanding Your Gains And Losses

    Investment Basics – Understanding Your Gains And Losses

    When you’re reviewing your investments, it’s important to remember that income and returns come from two main sources, Capital Gains and Interim Income.

    Capital gain (or loss)

    This is the difference in the overall value of your investment between when you purchased it and now (or the date that you sold it.) You can work it out as:

    ((Current or sale price per unit – purchase price) * number of units) – fees and taxes

    For example, let’s assume that you purchased 100 shares of Amazing Blue Widget Co. for $50 each and then sold them for $80 each. You had to pay $10 to buy, $10 to sell and 15% tax on the profit, this would work out to: (($80 – $50)*100) – $20 – $450 = $2,430 or a return of 48.6% on your original $5,000 investment.

    Interim income (dividends, interest, etc.)

    This is the amount that you’ve received in interim payments over the life of your investment. It’s calculated as:

    (Interim % * value of investment) – taxes

    You would need to work this out for each interim payment that you receive.

    For example, let’s assume that you’ve held 100 ABWC shares for three years and that they paid dividends of 3% a year; in the first year the shares were $50 each, in the second, $60 each, and in the third $80 each. Your return would be: 3% of $5,000, $6,000 and $8,000 less tax; this works out to: $485.

    Your total return

    This is equal to your capital gain (or loss) plus your interim income. You can then compare this to your original purchase price to understand what percentage gain or loss you’ve made.

    For example, your purchase price of ABWC shares was $5,000; over three years, you’ve made $2,430 in capital gains and $485 in interim returns (dividends) for a total of $2,915. That’s an increase of 58.3% over three years, or 19.4% a year – Not bad!

    You should compare your total return to your targets and life goals. This can help you decide if you should keep your investments, or if it would be wise to sell them.

  • Financial Planning to Ensure Financial Independence for Women

    Financial Planning to Ensure Financial Independence for Women

    Financial independence is an important goal for many people. It means you have the ability to support yourself financially, without relying on others for assistance. It also means you control your finances because you make your own financial decisions, rather than someone else making them for you.

    Regardless of who you are, financial independence makes it easier for you to achieve your dreams. It also gives you the peace of mind of knowing that you have the finances to live the life you want to live.

    For women, financial independence can be more elusive, as women typically face financial hurdles such as lower pay, career gaps while they care for their families, and other financial barriers. Additionally, women generally live longer than men, so they must plan financially for longer periods, and they must have enough financial knowledge to make decisions on their own in the event their spouse dies before they do.

    Here are ways women can effectively manage their finances and plan for the future.

    Find an advisor you trust

    Too many well-intentioned advice columns offer advice designed to “fix” women, focusing on what they do wrong with their money. This advice is outdated. You don’t need to be fixed, but you may need some guidance on what the best strategies are for you.

    Find an advisor who is willing to guide you by respecting where you are, where you want to go, how you want to spend your money, and what your unique financial needs are. Choose an advisor who works with your personality, your goals, and your concerns, and takes your insights seriously.

    Financial Plan Retirement Investment Diagram Concept

    Follow age-old advice

    Regardless of your gender, there are some important steps that can help you obtain financial independence. These include:

    • Deciding what you want
    • Creating a budget
    • Setting aside a certain amount of savings
    • Having an emergency fund
    • Paying down debt.

    Think of your retirement

    Part of taking charge of your financial future is thinking about your retirement. If you work for a company that offers a retirement plan, take advantage of it. If you don’t, consider opening your own retirement savings accounts. The earlier you do it, the longer you have to save for your retirement, which is important because you could live well into your 90s.

    Front View Arrangement Economy Elements

    Invest your money

    You need money in savings but you also need your money working for you. That means investing. You don’t have to invest in risky stocks if that doesn’t suit your personality or meet your needs. But investing can bring you back a higher return than savings accounts will. A diversified portfolio will limit your exposure to losses and give you more potential for growth.

    Have a comprehensive financial plan

    A budget will help you with your monthly spending, but a comprehensive financial plan takes into account your entire situation, including your income, expenses, assets, investments, retirement needs, estate planning needs, income taxes, and how they work together to help you achieve your goals.

    Financial independence involves you having the money you need to live the lifestyle you want, but it also means being confident in making your own financial decisions. It’s about having control over your money and making sure your money is working towards your goals.

  • Essential Tips to Help You Sell Your House Quickly

    Essential Tips to Help You Sell Your House Quickly

    Once you’ve made the decision to sell your home, chances are you’d like to do it as soon as possible. While some houses sell almost as quickly as they hit the market, others sit for a considerable amount of time without generating any offers from prospective buyers. Fortunately, there are several steps that you can take to increase the odds that your house is in hot demand and sells quickly.

    Choose the Right Real Estate Agent

    While every area has a handful of real estate agents who make a name for themselves by outselling their competitors, that doesn’t necessarily mean that one of them is the right agent for you. While a top seller may be just what you need, it’s more important that you choose an agent with whom you can work well and feel comfortable. Whether you choose a realtor who is an outgoing overachiever or a laid-back professional who takes a more relaxed approach is entirely up to you.

    Pick the Right Price

    There’s nothing that will knock your home out of the running more quickly than a price that’s too high. Before pricing your home, do your research and find out what comparable homes in your area are selling for. While your real estate agent will help you determine where to place your asking price, it is always a good idea to be an informed party in the process. Perform internet searches to locate homes in your neighborhood and the adjoining ones to find homes similar to yours and see how they’re priced and which ones are selling.

    Hosue For Sale

    Stage Your Home

    Although not all sellers invest the effort required to create a warm, welcoming atmosphere in their home so it looks inviting when potential buyers come through, smart sellers do. If you’ve ever watched the real estate shows on the home improvement channels on television, you’ve probably been exposed to the concept of home staging. De-cluttering, improving curb appeal, cleaning, and creating a neutral atmosphere are all key components of staging your home in a way that helps prospective buyers be able to imagine themselves in your home and encourages them to make an offer.

    List Your Home on the Internet

    Nowadays most home buyers start their search for a new house on the internet. What that means to you is that you should get your home listed on the internet as early in the selling process as you can. Ensure that your realtor gets your house, along with numerous attractive photos of the interior and exterior of the home, onto as many real estate search sites as he can. The more people that view your home, the more likely you’ll attract the buyer that is going to come through with an offer for your asking price.

    While selling a house in a hurry can pose challenges, they’re nothing that you can’t overcome with proper planning and action. Before you know it, you’ll have a signed contract in hand and be happily packing boxes for the move to your new place.